Insurer NN closed 2022 with a net loss of more than one and a half billion euros. Due to the rising interest rates, investments in real estate and shares have become less valuable, and that is affecting the company. The financial group still made an operating profit with its insurance activities.
The net loss amounted to 444 million euros in the last six months of 2022, compared to a profit of almost 1.9 billion euros in the same period a year earlier. Operating profit fell more than 17 percent to 760 million euros. This was partly because NN sold its asset management division. In addition, the life insurance business in the Netherlands and Japan and the European branch performed less than in the same period last year.
Knibbe is satisfied with NN’s ability to generate capital, which is good for the buffers that the insurer must maintain. Compared to the second half of 2021, NN raised more capital through its insurance and mortgage lending activities. This also caused an important measure of the financial health of insurers, the Solvency II ratio, to rise slightly to 197 percent at the end of last year. At the end of June that was still 196 percent.
The most important target is capital generation, says Knibbe. “We are now slightly above 1.7 billion euros and have issued a new target of 1.8 billion for 2025, because we expect an increase in our capital generation.”
The insurer also announces a new share buyback program. In the coming period, the company wants to buy back 250 million euros in its own shares to reward shareholders.
Further sales growth
CEO David Knibbe expects the financial group to show further growth in turnover, despite the fact that consumers may spend less due to high inflation.
‘Higher prices and lower disposable incomes could lead to some pressure on turnover in Europe in the short term,’ says Knibbe. But in the long term he expects that the structural demand for insurance products will result in revenue growth. People still want to hedge against all kinds of risks, according to the CEO. According to him, the current economic situation does not mean that NN customers are facing more payment problems than before.
Knibbe also points to the fact that the acquired MetLife activities in Poland and Greece already generated additional revenue in the second half of last year. Despite the cooling down of the Dutch housing market, NN also maintained its market share in the field of mortgages. From July to December, a total of 3.8 billion euros in new mortgages was issued.